Justification?

[Amy26]

Ok, so I've been reading some more threads and I'm seeing stuff about justifying what you spent money on? I asked my lawyer this question yesterday on the phone and he said I would not have to explain each and every expenditure I made but from some of the posts I've been reading it seems that you are having to do that?

If I had to justify each withdrawl coming out of my bank account I would be totally screwed.

[justbroke]

Your lawyer is correct. You do not need to justify what you spent money on.

However, when it comes to large amounts of money being spent just before filing (I can't define "large amounts" as it varies by Trustee/District/Local Procedure) you could be questioned on where it went.

Take for instance, you just did your taxes and received a refund of $12,000. Then you file Bankruptcy but the money is not in the Bank. Trustee sees your tax return and asks, where is the money?

They ask because they want to know if you made preferential payments, fraudulent transfers, insider payments, or other avoidable transfers.

It's that simple.

[Amy26]

Ah ok...thank you for clearing that up. I filed my taxes back in like February, so I hope that they won't be asking me where the refund went because I paid my bills with it!

Confused then why some of the other posters were talking about "accounting for monies" and such...perhaps it was a tax thing?

But still have another question. I'm going in to retain my lawyer tomorrow at which point he said after I retain him I can "stop paying the bills I am not keeping". We probably won't be filing till on or around June 6th. What exactly do I do with my paycheck? Do I just let it sit there? Can I spend it? I have one obligation to my veterinary facility that I feel that I should pay. They allowed me to put it on account last week and make payments on it, however if I didn't pay my other bills I would actually have enough money to pay off my vet bill. Would that be allowable? Or do I need to leave the debt there and continue to pay the "payments" that they are allowing me?

[canusaybroke]

Our lawyer told us to spend it on typical things....Groceries, food, gas, bills, clothing etc.....most TT's are looking for outrageous expenditures as said above......we've ate out a few times (Applebees, nothing major) bought our son a few new pairs of shorts for summer...but we didnt go spend $3000 on a new TV.....get my drift?

[justbroke]

Confused then why some of the other posters were talking about "accounting for monies" and such...perhaps it was a tax thing?

Yes, it's mostly the tax return because that is generally the largest "lump sum" amount of money many people get each year. I know some people who received $5,000 and only made $12K during the year. But, I digress on the socio-economic problems of tax credits.

I'm going in to retain my lawyer tomorrow at which point he said after I retain him I can "stop paying the bills I am not keeping". We probably won't be filing till on or around June 6th. What exactly do I do with my paycheck? Do I just let it sit there?

You pay for medical care, buy food (stock up!!!), clothing you have put off buying, any other "cost of living" types of things. Make sure the clothing isn't extravagant. Should be reasonable and necessary. Get some new shoes too. Make automobile repairs that you've put off as well. Keep receipts.

I have one obligation to my veterinary facility that I feel that I should pay. They allowed me to put it on account last week and make payments on it, however if I didn't pay my other bills I would actually have enough money to pay off my vet bill. Would that be allowable?

You can't do that, as that is a preferential payment. However, you may not get any gripe over it... I would just avoid the questions completely by not doing such a thing.

[willbfree]

The trustee required us specifically to explain where the money went on any transaction/money order/check over $500 in the last three months. Also how the tax refund check was spent we had to do an accounting on that money. Trustee didn't want down to the penny but was satisfied with receipts for auto repairs, house repairs, HOA fees, etc for the bulk of the funds.

[Amy26]

Ok I see. So, I'm allowed to at least make the small payment to the vet? I plan on keeping (reaffirming) my car and a few other things...so I assume I can keep making payments on that? Or do I have to stop making payments all together?

I am going to be paying for an immigration lawyer and going through an immigration process for my fiancee which requires me to pay out a bit. As long as I have proof of what I spent it on and keep the receipts, that should be permissable right?

Also, how do I know if I have a good lawyer? I mean I can't find anything negative about him on the internet...he seems really nice and attentive... but how do I know? I called around to some other firms and their prices were much cheaper than his... is his more because he's better? Or more because he scams people for their money and doesn't do anything? Are these firms that offer to do it for 700 or 900 dollars legit? I'm so confused when someone says get yourself a "good" lawyer... how do you know??

Hmm and with my tax return... I filed back in February and I had no income. So, my tax return literally paid my mortgage etc... how would I prove that? Aside from having it recorded in my bank statement of a deposit from the IRS and then seeing auto debits coming out that's all I have.

[LuciluS]

O Amy. Yes, you can pay your secured Creditors.

But, paying the Attorney for your Fiance's immigration???? When were you planning on paying him.

If you haven't paid your Attorney in full or not at all. Here's a way to test him as I've read so many say after they pay their Attorney in full, they won't answer questions in between last payment and filing. Call Him and ask him about paying the Immigration Attorney. Mention preferential payments and 'look back periods of Trustees'.

As for your auto mortgage payments, yes your Bank Statement will work.

Gee, I was just told on this forum today that I cannot pay the hospital over $600 because it is considered a preferential payment. Hubby was in there for a week in April. We are not filing until 9/09, but there's a time limit on preferential payments.


Just some helpful hints for you.

Luci

[Amy26]

What about unsecured? Like my vet bill.

What is all the question marks about the immigration thing? We're getting married on June 6th so, will be retaining the lawyer for that right about that time. It costs 1400 upfront for the attorney and it costs like 1300 to file with the gov't. So, between his parents and my parents and me putting a bit into it, we've put that money aside.

I must do both things...it just sucks that it is coming at the same time.

This preferential payment thing seems very confusing to me. I did not decide to go down this path till this week so up till now, I've been borrowing from family and borrowing from my credit cards to pay all my bills...